Although the UK's broadband rollout is trailing behind all other technologically advanced European countries, the country could lead Europe in online consumer revenues by 2005 thanks to its relaxed attitude to gambling, according to research by Schema Consulting.

Germany has the DSL highest penetration by far, with around 3 percent of its lines converted. By contrast, the UK's 0.3 percent is behind every country except Greece, Ireland, Portugal and Luxembourg. The take-up in Germany has been particularly high because of the previous roll-out of ISDN and the fact that Deutsche Telekom was able to effectively prevent flat-rate dial-up access, said David Brown, Schema president, presenting these figures at Last Mile Europe in London on Tuesday.

"Most countries are between 1 percent and 5 percent (of the population with DSL)," he said, "and growth rates are around 100 percent. Most countries should reach 10 percent by around 2004."

However, Brown predicts that $38bn will be spent on online entertainment in Europe in 2005. The figure is based on an estimate that online entertainment will make up 6 percent of entertainment spending, which itself will make up 8 percent of the $8 trillion of disposable income in Europe in that year.

Online gambling will be the largest sector, says Schema, making up 39 percent of the total, with multimedia second at 29 percent and games providing 13 percent.

Surprisingly, the UK will take 35 percent of the overall spend, said Brown, because it is more accepting of gambling -- other countries are more likely to have laws restricting it. Germany will take 15 percent and France 14 percent.

It is also worth pointing out that in Schema's projections, fixed Internet makes up the greatest part (41 percent) but not the overall majority of interactive media. Mobile applications will take 26 percent, and digital TV will take 33 percent, they expect.

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